What does a “vested balance” mean in an employee stock ownership plan?
Employee stock ownership plans typically commit a total amount of stock which the employee will eventually get as a component of their compensation. Companies typically set rules that gradually award the stock as a means of ensuring the employee will stay with the company for a given period of time in order to earn this value. The process of “unlocking” that equity is known as vesting. Thus, a vested balance is the amount of stock equity the employee has earned as of the present. The vested balance might be less than the total stock ownership the employee will eventually earn if they are not yet fully vested.
